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Applying for a loan? Here’s what to keep in mind

If you’re in the process of applying for a personal loan, there are key questions to ask yourself. Remember that borrowing money especially large amounts of money is pretty serious. Ask yourself the following questions before signing any deal to ensure that you’re making the right decision:

Do you really need the loan?

Just because you are eligible for a loan doesn’t mean you should take it. You might be surprised but there are plenty of people who borrow money without even needing it. It’s available after all so might as well take it. That kind of mindset, however, can be dangerous. Borrow only when needed to avoid complications.

How much do you need?

If you’re sure that you really need the loan, the next step is to ask yourself how much do you really need? Avoid borrowing more just because it’s available. Doing so will also mean your monthly repayments.

Do you know how much the loan costs?

Before signing any dotted line, make sure you understand the cost of the loan. Investigate the interest rate and related charges. Compare it with similar offers so you’ll have a better idea of what’s available in the market.

Do you understand the terms and conditions?

Taking your time to understand the terms and conditions of the personal loan is also imperative. Speak with a financial adviser if needed and ask questions you can think of to get all bases covered.

Can your budget handle the month repayments?

Most important of all, you need to make sure your monthly budget can actually cover the monthly repayments. Before entering any credit agreement, you should make a commitment to pay your dues on or before the due time. You can only do this if you ensure you can afford the monthly repayments prior to signing any dotted line.